He also welcomed the new measures to tackle cross-Border organised crime, including a new taskforce led by officials from An Garda Síochána, the PSNI and revenue officers from both jurisdictions.

British prime minister David Cameron described the agreement as “an important turning point for Northern Ireland”.

“The agreement secures sustainability for Northern Ireland’s budget, sets out how we’ll deal with paramilitary groups, and could provide a basis for a shared future for the people of Northern Ireland.”

Sinn Féin Deputy First Minister Martin McGuinness said what had been achieved had protected the North from “the worst excesses of Tory austerity”.

He said the cuts to the welfare budgets and other cuts were unfair but pointed to the agreed package of £585 million over four years, to mitigate the effect of cuts imposed elsewhere in the UK.

DUP First Minister Peter Robinson said there was a clear commitment to disband all paramilitary structures. “Today represents another milestone along the way as we normalise and build our society. We must ensure that, through co-operation and common purpose the spirit, vision and promise of the document is fulfilled,” he said.

The SDLP struck a slightly discordant note. New leader Colum Eastwood said it would not be bullied into signing up to DUP and Sinn Féin proposals.

However, the main Christian churches welcomed the development in a a joint statement.